(Sharecast News) - RSA Insurance posted a rise in interim underlying pre-tax profit on Thursday despite disruption from the Covid-19 pandemic, mainly on the back of a solid underwriting performance.
First-half underlying pre-tax profit rose 14% to £332m - ahead of consensus expectations of £237m - as underwriting profit grew 33% to £240m. However, statutory pre-tax profit declined 7% to £211m "due to Covid-19 market related impacts".
Net written premiums (NWP) dipped 3% to £3.1bn. RSA estimated that the coronavirus pandemic reduced NWP by around £110m, or 3%, consisting of price reductions, refunds, coverage changes and specific business line volume impacts.
RSA, which announced the suspension of its final dividend in April, said an interim dividend will not be declared but it expects to resume dividends "as soon as judged prudent, which absent unforeseen events should be by the time of full year results 2020".
The company also said it aims to catch up on missed dividend payments over time.
Chief executive Stephen Hester said: "RSA is reporting good growth in underwriting profits for the first half from continued business improvement actions. Covid-19 impacts on operating profits were broadly neutral in H1, though related financial market charges reduced our statutory results.
"Covid-19 has dominated recent months. Uncertain times put a special premium on sustaining customer service whilst operating safely and securely for our people and other stakeholders. This has been our focus and will remain so over the rest of the year. The recovery path from the pandemic itself is not yet certain, as well as its human and economic consequences. Nevertheless, we see good prospects for RSA remaining resilient and emerging strongly from this period."
(Sharecast News) - Peel Hunt downgraded RSA Insurance on Friday to 'hold' from 'buy' but lifted the price target to 685p, which is the price it has agreed to be bought at by Intact Financial Corporation and Danish insurer Tryg.